New Delhi: India will try to keep its fiscal deficit under 5% of the gross domestic product, even as a slowing economy and worsening global outlook make it “difficult" to meet fiscal targets, a top government adviser said in a interview broadcast on Monday.

The economy is expected to grow 8.1% in the current fiscal year to end-March 2012, provided the euro zone crisis does not develop into a recession, Kaushik Basu, the finance minister’s chief economic adviser, told a television channel.

In February, the government had budgeted a fiscal deficit of 4.6% of GDP for the fiscal year 2011/12, narrower than 4.7% in the previous financial year.

“The fiscal targets will be difficult but the fiscal targets are still very achievable," Basu said.

“We will be under 5%. We are determined to keep it there," he said, referring to the fiscal deficit.

Any slippage on the fiscal gap target is expected to force the government to resort to higher market borrowing, crowding out private borrowers.

New Delhi has budgeted a gross borrowing of ₹ 4.17 trillion ($87.2 billion) for the current fiscal year and has already borrowed 2.5 trillion between April and September.

It will decide on its borrowing schedule for the second half of the financial year 2011/12 on 3 Oct.

Most market participants expect the government to raise its market borrowing by ₹ 30,000 crore to ₹ 70,000 crore depending on its fiscal performance.

New Delhi’s fiscal calculations were based on a low subsidy bill, high economic growth and higher proceeds from stake sales in state-run firms.

However, a slowdown in the domestic economy, high global crude prices and mounting global economic uncertainty amid a prolonged euro zone debt crisis that has roiled the world markets appear to have upset those calculations.

The federal government’s fiscal deficit between April-July was 55.4% of the budget estimates, sharply higher than 23.8% during the same period last year.

Its net tax receipts in the first four months of the current fiscal year amounted just 17.2 % of the full year target compared with 21.1% in the year ago period.